Mr. Sunday Adegbite Taiwo V. Serah Adegboro & Ors (2011)

LAWGLOBAL HUB Lead Judgment Report

BODE RHODES-VIVOUR, JSC

The Late Michael Adegboro was the chairman and Managing Director of Adegboro constructions (Nig) Ltd.

By a Legal Mortgage Deed executed on the 20th of March, 1993 between Adegboro constructions (Nig) Ltd of No. 245 Ibrahim Taiwo Road, Ilorin, Kwara state, as the borrower, Late Michael Adegboro, also of No.245 Ibrahim Taiwo Road, Ilorin as the surety, on one part, and the now defunct society General Bank (Nig) Ltd plc as the lending Bank on the other part, the Late Michael Adegboro secured a loan of N80,000 for his company by agreeing to mortgage his property situate on Agbabiaka Road, Gaa Akanbi area, near Agba Dam Housing Estate, Ilorin, Kwara state. The property is identified with customary Right of occupancy No.1579 dated the 30th of July, 1976. In that property lived his wife and children. The company and the surety defaulted in the payment of the loan, and at the time of his death on the 16th of September 1984 the loan was still unpaid. Owing to the company’s default to meet its obligations to the Bank, the Bank as unpaid mortgagee exercised its right of sale under the Deed of Mortgagee.

It appointed an Auctioneer, the 3rd respondent to sell the property by public auction. On 16/6/89, the 3rd respondent pasted a Notice of sale on the property which indicated that the property would be sold by public auction the next day, i.e 17/6/89. On 17/6/89, Mr. Sunday Adegbite Taiwo, the appellant bought the property for the sum of N140,000.00 (One hundred and forty thousand Naira).

The 1st respondent, Mrs. Sarah Adegboro, who before and at the time of the sale lived in the property with her children, claimed to be the widow of the late Mr. Michael Adegboro, she quickly filed an action in the High Court of Kwara State challenging the sale of the property to the appellant. The reliefs sought in the trial court were for:

1. A declaration that the purported sale by auction of the property of Mr. M.A. Adegboro (deceased) situate at Agbabiaka Road, near Agba Dam Housing Estate, Gaa Akanbi Area, Ilorin on 17/6/89 on behalf of the 1st defendant by the 2nd defendant is in violent breach of the Auctioneers Law (Cap.10) Law of Kwara State and therefore null and void.
2. A declaration that the 2nd defendant by letting the property in question which is worth well over N340,000 go for a paltry sum of N140,000 was negligent, reckless or fraudulent and had sold in bad faith.
3. An order setting aside the purported sale by auction of the property in question to the 3rd defendant.

The 1st respondent, as plaintiff testified. There was a second witness for the plaintiff who also testified on oath. Three witnesses testified for the defendants, and two documents, to wit: Notice of sale by auction, and Report and valuation in respect of the property of Late Mr. M.A. Adegboro prepared by Toki and Co were admitted in evidence as exhibits 1 and 2 respectively.

The complaint of the plaintiff was that the house in which she lived was sold in contravention of section 19 of the Auctioneers Act applicable in Kwara State and at gross under value for N140,000.00. She testified that on 16/6/89 she heard on Radio Kwara at 4pm that the house in which she lived with her children would be sold on 17/6/89 at 9.a.m. The defendants defended the exercise carried out by the Auctioneer.

In a judgment delivered on the 6th day of October, 1993 the learned trial judge entered judgment in favour of the 1st respondent (plaintiff). The penultimate paragraph of the judgment reads:

“In the final analysis and for the reasons I have given above, the three reliefs sought by the plaintiff as stated in paragraph 21(1-3) of the amended statement of claim are hereby granted. Judgment is hereby entered in favour of the Plaintiff…”

It was the appellant who bought the property at the Auction. Obviously, dissatisfied with the judgment he lodged an appeal in the Kaduna Division of the Court of Appeal. That court affirmed the decision of the trial court in a well considered judgment delivered on the 14th of July 1977. This appeal is against that judgment.

In accordance with Rules of this court briefs of argument were filed and exchanged. The appellants brief was deemed filed on the 11th of July 2007. The 1st respondents brief was deemed filed on 8th of June, 2009.

A reply brief was filed on 22nd June, 2009. An Intervener/respondents brief was filed on the 22nd of March, 2010.

The appellant formulated three issues for determination form his seven Grounds of Appeal. They are:

1. Whether having regard to the 1st respondent’s claim and pleadings before the court, the learned justices of the Court of Appeal were right in holding that the 1st respondent had Locus standi to institute this action.
2. Whether having regard to the evidence adduced by the parties at trial in this case, and the state of the Law the learned Justices of the court of Appeal were right in affirming that the auction sale and the transfer of the property to the appellant was null and void and in contravention of Section 19 of Auction Law of Kwara State.
3. Whether from the totality of the evidence led at trial regarding the value of the property, can the learned Justices of the Court of Appeal be right in their decision that the property was sold at undervalue price which renders the auction sale unlawful.

Three issues were also formulated by the 1st respondent. They are: